How The German Tax System Works

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Interested in moving to Berlin?

This post is an extract from my book The BreakingOut Guide To Moving To Berlin

In this post I look at how the German tax system works.

Check out my book The BreakingOut Guide To Moving To Berlin

The German Tax System in Berlin

The tax system in Germany is broadly similar to that of other western European countries in most though not all respects.

You pay income tax throughout the year, usually by direct deductions every month from your salary by your employer. At the end of the year you submit a tax return and an adjustment is made for any over or under payment.

All German residents are liable for income tax levied on their worldwide income and assets.

You may also be liable for taxes in your home country. For example, if you are from the US then you are also required under US tax law to submit a US tax return every year even if you pay tax in Germany.

The US and UK have adopted a self-assessment system for income tax. In Germany the system is different. In Germany, the taxpayer has to submit an income tax return ever year.

The final tax amount is calculated by the tax office. As a result, every taxpayer receives a tax assessment certificate.

The Finanzamt

The tax authority in Germany is known as the Finanzamt.

One difference with the UK is that in Germany the tax office system is very localized. You have to deal with your local tax office. Many things in Germany are done locally rather than nationally and the administration of the tax system is one of them.

The tax system in Germany is administered through a network of tax offices covering the country. Each one is only responsible for their own designated area. Your tax office will be the one responsible for the area where you live.

Note it’s where you live that counts, not where you work.

If you have more than one residence, eg one for Monday to Friday work in another town, and another somewhere else, then it is the location that you regard as your main residence that counts. This is usually be the location where you are registered with the local authority Meldeamt.

Another difference is that the German tax authorities deduct a tax on behalf of the Protestant and Catholic churches. More about this later below.

How To Locate Your Finanzamt

You can find a full list of the Tax offices or Finanzaemter in Berlin here:

www.berlin.de/sen/finanzen/steuern/finanzaemter

For elsewhere in Germany you can use the official search machine to find your local tax office at: gemfa.bzst.bund.de

What is the Lohnsteuerkarte?

In the old days before the Internet and digitalization, every employee in Germany had something called the Lohnsteuerkarte or tax card.

The Lohnsteuerkarte or “wages-tax card” was a piece of card which everyone received from their local borough office every year (for some reason the boroughs were responsible for issuing tax cards and not the tax office as you might have expected). It contained basic details about your status as a tax payer – name, address, marital status, tax number, tax class, etc.

Traditionally you handed your Lohnsteuerkarte to your employer and they used it as the basis to deduct your income tax.

The Lohnsteuerkarte was thus the “key” to the whole system and you received a new Lohnsteuerkarte every year from your local authority.

But not any more.

The Lohnsteuerkarte Has Gone Digital

Since 2013 the old style physical Lohnsteuerkarte is not issued anymore. The whole thing is now completely virtual and online.

The new electronic Lohnsteuerkarte is officially called ELStAM or „Elektronische Lohnsteuerabzugsmerkmale“ (“electronic wages tax particulars”), though many people still use the old term of Lohnsteuerkarte, even though it no longer exists in the way it used to.

What Your Employer Needs From You For Income Tax Purposes

Your employer will need:

your Steuer-Identifikationsnummer

your date of birth, and

information as to whether your employment income is a main or supplementary income for you.

That’s all.

How the ELStAM System Works

You give your employer your Tax Id number or Steuer-Identifikationsnummer, together with your date of birth. All the remaining data required in order to process your income tax deducations are then called up by your employer from ELSTaM.

This now means less overhead for employees, as you no longer have to go to the Finanzamt to get a Lohnsteuerkarte and nor do you have to mess around with bits of paper.

Along with the Lohnsteuerkarte or the electronic ELStAM as it is now, the other “key” to the system is your tax number.

This is where it gets a bit more complicated.

Tax Numbers in Germany Are Confusing

A lot of people get confused by the tax identity number system in Germany. And not just expats, Germans themselves also find it confusing.

This is because at the moment, the Finanzamt uses two separate tax id number systems and the system has changed in recent years and is still changing.

Basically it’s like this.

Your Steuernummer or Tax Number

Every tax payer gets issued with a tax number (Steuernummer). Sounds straightforward enough. No problem with that.

But one problem is that Germany likes to do things on a localized and regionalized basis.

So each Finanzamt issues its own tax numbers or Steuernummer for the taxpayers in its own little Reich, regardless of what other tax offices in other parts of the country are doing.

If you then change your address and move to an area under the administration of a different Finanzamt, then you get a different new Steuernummer from that new Finanzamt.

BUT – your old Steuernummer still applies for the time you lived at your previous address and for your tax affairs with that particular office.

So you can end up having more than one tax number if you change your address. Some people even have several tax numbers. You can also be issued with another extra tax number if you take up a secondary or different occupation eg self-employment. Now that’s complicated.

Next problem.

The introduction of the Internet-based ELSTER online tax administration system meant it was necessary to bring in another tax number for each tax payer so they can use the ELSTER system.

This tax number was called the eTIN or Elektronische Transferidentifikationsnummer (electronic Taxpayer Identifiation Number). So there was another tax number you had to memorize.

The government then decided this whole system had become too complicated and needed simplifying – in particular to make it easier to operate the ELSTER system, as well as to try to cull the number of different tax numbers everyone was having to deal with.

So to cut down the number of different tax numbers they introduced yet another tax number. No kidding.

This is the so-called Steuerliche identifikationsnummer or Tax ID Number (Steuer-Id-Nr).

The Steuerliche Identifikationsnummer or Tax-Id Number

Since 2007 taxpayers now also have a second tax number, the “Steuerliche identifikationsnummer” or Steuer-ID-Nr for short. Sometimes this number is simply referred to as the “IdNr”.

Your Steuer-ID-Nr records your name, address, sex, date of birth, place of birth and your current local Finanzamt.

In contrast to the old Steuernummer tax numbers, this new 11 digit Steuer-Id-Nr is a permanent life-long tax number which you keep regardless of where you live or move within Germany. And nor does it change according to your taxable occupation activity.

This new Steuer-Id-Nr also replaces the previous eTIN.

So that’s at least two benefits. And the idea is the new Steuer Id-Nr will, when the Finanzamt is ready, completely replace the old original Steuernummer system as well.

But for the time being both systems exist in parallel, which causes confusion. So we have the worst of both worlds and all the confusion. But things will be better in the future (they say).

Alles klar?

To summarize:

Your Steuernummer you get from your local Finanzamt for where you live. You will be allocated this when you visit the Finanzamt to register for the first time.

Your Steuerliche-Identifications-Nummer you get from the central Federal Tax authority by post. This is the number you need to give to your employer.

How Do I Get my Steuer-Id-Nr?

The annoying thing is you can’t obtain this new life-long valid Steuer-ID-Nr from your Finanzamt. You have to apply for the Steuer-Id-Nr from another place, namely the Bundeszentralamt für Steuern who are based in Bonn.

The Bundeszentralamt für Steuern is effectively the “head office” and big boss of all the Finanzamts in Germany.

You can apply for your Steuer-ID-Nr via the website of the Bundeszentralamt für Steuern or alternatively you can apply by post.

Your Steuer-Id-Nr will then be send to you by the Bundeszentralamt für Steuern (BZSt) by post. They insist on sending this by post – you cannot receive it by email or any other way. This they say is for data protection reasons.  According to their website, the processing time currently takes up to 4 weeks.

My Advice: Apply for your Steuer-ID-Nr directly online at the official site at https://www.bzst.de/DE/Steuern_National/Steuerliche_Identifikationsnummer/ID_Eingabeformular/ID_Node.html This is the simplest way and it will speed things up a bit.

By the way, the site also has a (very modest) number of its pages translated into English.

How Do I Obtain My Steuernummer?

Meanwhile your tax number or Steuernummer is still issued to you by your local Finanzamt.

If you change your Finanzamt eg through change of address, then you will receive a new tax number from your new Finanzamt that is resposible for your new address. It’s possible therefore for a person to have several tax numbers throughout their life.

There are also different tax numbers for different activities, eg self-employment. The tax number includes a code based on the Federal land in which it was issued.

With the introduction of the ELSTER tax system (ELektronische STeuerERklärung) the format of the Steuernummer in Germany are being nationally unified and the new ones now all have 13 digits.

The idea is that these Steuernummer will eventually be abolished and we will just have the Steuer-ID-Nr.

Where Can I Find My Steuernummer?

You can find the tax number on your annual Income Tax Certificate or Einkommenssteuerbescheid.

What Do You Need the Steuernummer For?

You need to quote your Steuernummer when you submit your Tax return or Steuererklärung and in all communication with your Finanzamt.

Important: If you do not have your Steuer-Id-Nr, then your employer has to deduct tax using tax class VI until you obtain your number.

This is because without your Steuer-Id-Nr. it isn’t possible to access your ELStAM details. Your employer can’t obtain your IdNr from the Finanzamt for you.

However, you will be able to claim any overpaid tax back at the end of the year when you submit your tax return.

My advice: Apply for your Steuer-Id-Nr as soon as you can (it can take up to 4 weeks or so to arrive).

Lohnsteuer and Einkommenssteuer

Income tax is sometimes referred to as Lohnsteuer or wages tax is deducted automatically at source by employers on behalf of the tax authorities. This is the equivalent of the UK PAYE income tax.

Income from from other sources such as self-employment, fees for freelance or other services, rents received, investment interest, is known as Einkommensteuer (income tax).

Effectively they are both the same. The only real difference between Lohnsteuer and Einkommensteuer is that Lohnsteuer is collected at source and paid directly to the Finanzamt (tax office) by your employer. For Einkommenssteuer you are responsible for paying the Einkommensteuer to the Finanzamt yourself.

Tax Rates in Germany

Germany has the reputation of being a high tax country. This can be the case for high income earning individuals. The top income tax rate is 45%. There is also the solidarity surcharge tax which is 5.5% of your income tax in addition. This make a combined effective top income tax rate of 47.5%.

For lower and middle-income earners the tax burden is moderate by international comparison. In Germany you can also make many more tax-free deductions than is often the case elsewhere. This can come as a pleasant surprise.

Not so pleasant are the high rates of social insurance contributions. Social insurance contributions in Germany are among the highest in Europe.

For 2015 a taxable income of less than 8,354 Euros is tax-free for a single person or 16,708 Euros for a married couple.

The tax rate increases progressively from 14% to 42% for 52,882 Euros per year or 105,764 Euros for a married couple.

There is also the “solidarity surcharge” of 5.5% of the tax on top. This is a tax that was introduced in 1990 to help finance the cost of reconstructing the states of the former East Germany and which still remains in force.

As in many other countries, Germany allows a variety of deductions that can minimize taxable income. Deductions can be made for a range of different circumstances such as children under 18 – or under 27 if still attending full-time education, some insurance premiums, political and charitable donations. More about these below.

Deductions from income are also made for the four main social welfare funds: unemployment insurance, pensions, health insurance, and long-term nursing care. These contributions are shared equally by employee and employer.  More about these contributions below.

Income tax is progressive, starting at 18.9 percent and rising incrementally to 42 percent, and at the highest income level to 45 percent.

The top tax rate of 42 percent applies to taxable income above 52,882 Euros, or for married persons 105,763 Euros.

In addition to income tax, everyone has to pay solidarity tax or Solidaritaetszuschlag, which is capped at 5.5 percent of your income tax.

Interest, dividends and capital gains on stocks and shares are subject to a flat tax of 25 percent plus 5.5 percent, which gives a total tax liability of 26.38 percent.

Official Online Tax Calculator

The German tax authorities have an online tax calculator.

For Lohnsteuer (for employees):

www.bmf-steuerrechner.de/bl2015

For Einkommenssteuer (for freelancers and self-employed):

www.bmf-steuerrechner.de/ekst

ELSTER – the Online Finanzamt

ElsterOnline is a service which enables you to process many tax activities directly online, without having to print out or send by post. this includes your annual tax return.

Needless to say, this speeds up the whole tax return procedure both for the public as well as for the tax office. It makes the whole tax affair process much easier for everyone.

Elster also means that tax rebates are processed more quickly than in the past and you will be able to receive any money due back to you faster than often used to be the case.

“ELSTER” is actually three systems of software.

First of all ELSTER is the name of the computer system used by the Finanzamt to administer the tax system.

There is also a tax software program for the public called ElsterFormular. This has a relatively simple interface based on the old style paper tax forms and it uses the ELSTER system.

Then there is ElsterOnline, which is the public Internet-Portal for ELSTER.

ElsterOnline is the Web interface ie website which gives you access to the various online services of the Finanzamt. ElsterOnline is in effect the “electronic Finanzamt”. This is usually what people mean when they refer to “Elster”.

Elster by the way is also the German word for magpie. It probably isn’t entirely a co-incidence that the German tax authority decided to name their computer system after a bird known for pinching items of value and taking them back to its nest. Germans do have a sense of humour after all!

How to register for ElsterOnline

You first need to get your Steuer-Identifikationsnummer.

When you register, you will receive an electonic certificate in the form of a computer file token. You need to keep this stored safe and secure on your computer, or on a secure USB stick. Whenever you want to use the ElsterOnline service, at the login it will request you to supply this token.

Your web browser also needs to support Java in order to use ElsterOnline. So you may need to install Java first.

You can also download a Finanzamt tool called ELSTER (ELektronische STeuerERklärung) onto your computer. This enables you to fill out and generate your tax return on your PC, which you can then print out and send by post to your Finanzamt.

Registering to use ElsterOnline for the first time is a bit bureaucratic, because of security concerns. It’s important to make sure you carry out the registration steps correctly and in the right sequence. It can take a few weeks or longer for your Steuer-ID Nummer to arrive – by post.

But once you’ve completed the registration process the system is much more convenient.

However, you still need to visit your local Finanzamt in person.

With more of the tax administration with the public being dealt with online, their offices appear to be less hectic and less of a nightmare to visit than they sometimes used to be which is a plus.

In addition to Lohnsteuer or Einkommenssteuer, there are a number of other taxes and contributions that you will also have to pay in Germany.

The Solidarity Surcharge or Solidaritaetszuschlag

The Solidarity Surcharge, sometimes referred to as the “Soli” is a tax that was introduced shortly after German reunification as temporary tax to help finance the cost of reconstructing and restructuring the old communist regions of East Germany.

Some 25 years later the Soli is still in force. Temporary taxes tend to stick around.

Germany’s Church Tax

One important point regarding the form that snares many expats the first time:  German tax authorities collect a tax called Kirchensteuer or “Church Tax” on behalf of the Roman-Catholic and Protestant (Evangelical) denominations.

You are not required to pay the tax unless you wish to be officially affiliated with one of Germany’s established churches; this is only payable if you are a member of either the Catholic or Protestant church. Other religious affiliations such as Moslem, Hindu, Jewish or Buddhist are not part of the Kirchensteuer system.

The Church Tax amounts to between around 8 to 9 percent of your income tax, depending on which Federal state you live in.

If you do not want to pay this, then you should leave the box for “Religion” blank. Don’t even mention Church of England or “evangelisch” either, as this will automatically mean you get assigned to the German Protestant Church authorities.

If you later find you have inadvertently registered for inclusion in the Church Tax then you can still go back and change this afterwards.

You need to make a trip back to the municipal office and fill in and sign an official “Erklärung zum Austreten aus der Kirche”  – literally, “Declaration of stepping out of the church”.

Whether you’ll get any tax back is another matter, but you can give it a try when you fill in your annual tax return.

Social Insurance Deductions in Germany

What considerably reduces the final amount of take-home pay for people working in Germany is the large number and rate of various social insurance deductions that are made.

Social security deductions are not classed as tax, but rather as social insurance or Sozialversicherung.

Under the term Sozialversicherung are the following:

  • Health insurance (Krankenversicherung)  around 7-8% of income
  • Long term nursing care insurance (Pflegeversicherung) at 1.025 % of income
  • Unemployment insurance (Arbeitslosenversicherung) at 1.5 % of income
  • State pension insurance (Rentenversicherung) at 9.45 % of income

The Annual Tax Return in Germany  (Steuererklaerung)

Everyone subject to German income tax has to complete and file an income tax return every year with the appropriate local tax office. The tax office responsible depends upon your place of residence.

By the way, in Germany, the tax year is the normal calendar year 1 January to 31 December, rather than the strange April-April tax year that the UK uses.

The normal tax return deadline is 31 May. This is automatically extended to 31 December if your tax return is prepared by a tax accountant (Steuerberater) or other tax professional.

Note that penalties and interest can be charged if your return is filed late without good legitimate reason.

Your tax return is then reviewed by the tax authorities. This can take three to six months. In some cases it may be done more quickly. Once the review is completed, you will received an assessment notice by post.

If it turns out that you have overpaid tax, then you will receive the amount credited to your bank account.

How To Draft Your Tax Return

You can still submit tax returns manually by post.

You can obtain the printed forms from the tax office, or alternatively you can now download them directly from the website of your Finanzamt.

or from ElsterOnline at www.elsteronline.de/eportal

If you’re an employee then you’ll need to download the following forms:

ESt 1 V  (this is the main tax return form that contains your basic details such as name, address, tax nummer, etc)

Anlage N  (this form is for listing your income as an employee)

Anlage Vorsorgeaufwand  (the form used to list your tax deductions)

You can also do your tax return on your computer by downloading the ElsterFormular software.

Alternatively there are also commercial proprietary software packages such as from WiSo which also enable you to do this.

You then print it out and send it by post to the Finanzamt.

And last but not least, you can enter your entire tax return online directly on the ElsterOnline site, provided you have a full login account.

However the online system Elster makes the process a lot easier, provided you know what you are doing. The system does also help in only accepting your return if you have completed it correctly – or at least as correctly as it can ascertain at that stage, and mostly indicates to you what you have filled in wrong so you can correct it there and then.

But if you are not certain about how to fill in the forms, ElsterOnline might not be the best way.

Unless you speak fluent German, the process of completing your tax return will be a complex task. It’s complicated enough even for Germans. It’s probably better in this case to rely on a Steuerberater (tax accountant) or Lohnsteuerhilfeverein (a non-profit making taxpayers help association).

My advice: If you don’t speak fluent German, and/or are completely lost when it comes to tax matters, take out a membership with the Lohnsteuerhilfeverein – or alternatively contact a Steuerberater. They will help you complete your tax reform or even take care of it completely for you if you wish.

Tax Deductible Expenses in Germany

One good thing at least about the German tax system is that it lets you claim a whole range of expenses against your income provided they are actually largely or exclusively used for your work.

Employees can deduct a lump sum for work related expenses of a maximum of 1,000 Euros per year. If your expenses exceed this amount then you can deduct these additional expenses provided you have documentary proof of them.

There is a standard deduction for commuting between work and home by car (one way) of 0.30 Euros per kilometre. This is known as the Kilometerpauschal.

Germany also allows for the deduction of many other expenses incurred in connection with your work, such as travelling expenses, subscriptions to professional associations and trade unions, expenses incurred for maintaining dual households, as well as IT equipment and other materials needed for your work. You can also make a deduction for your home office in some circumstances.

Below is a list of some of the items which are tax-deductible in Germany. This isn’t a comprehensive list of tax deductions, but is an example of the most common items. Note that there are specific conditions applying to some of these.

My Advice: Consult a Steuerberater or the Lohnsteuerhilfeverein as to whether and how much you may be able to claim for these tax-deductibles and what documentation you require.

Relocation: These are costs which are incurred in relation to your move to Germany, such as travel, transportation of personal belongings, real estate agent fees for rental property etc.

Home Office: You can claim deductions for a separate room in your home provided you use it exclusively for work. This can include a proportion of rent, electricity, heating etc.

Daily travel to work: Expenses can be claimed with a so-called “Kilometerpauschal” or kilometer allowance set at 0,30 Euros per kilometer.

Professional Training: You can claim for training expenses for your work provided they are not funded by your employer.

Books & Magazines: Publications which are related to your work or profession are tax-deductible.

Professional Association/Trade Union Membership: Membership fees for these organizations are deductible.

Client Entertainment: This includes meals for customers or potential customers. You need to obtain a proper receipt completed with details of who attended and the reason for the invite.

Internet/Phone Line/Mobile: These can be deducted, provided they are used largely or exclusively for your work.

Car: Expenses for your car can be deducted to the extent that they are incurred for for work related purposes.

Legal and Tax Advice: For legal and tax consultancy sessions related to your work or profession you are permitted to claim these.

Computer/Laptop and related equipment eg printer: Provided these are used exclusively for work.

Secondary Household: If your work involves maintaining a second place of residence, such as a room or apartment in another town, then you can claim the costs of this as well as the costs of travel between your two residences.

Job Search: Expenses incurred whilst searching for work deductible, such as stationary, postage, phone calls, travel, hotel stays, etc.

Student Loan Interest: Interest payments on student loans can be tax-deductible.

Clothing: You can claim for work clothes (but not standard formal office wear such as suits, shirts, ties etc) provided they are required for and are solely used for work. Examples are protective or safety clothing for building sites, factory plants or laboratories.

Expats Moving To Germany

Unlike some other countries for example the Netherlands, Germany does not have a special tax rate for incoming expats.

However, you are permitted in certain circumstances to claim for relocation expenses incurred when moving to Germany. This can also include your own flight costs as well as the costs involved in finding an apartment such as real estate agency fees.

But whether in practice you can actually claim for these depends on whether your employer has reimbursed you for these relocation expenses. If you have not received any reimbursement, or have only received reimbursement for some costs and not others, then you are permitted to claim these as tax-deductible expenses.

Income from Overseas

Bear in mind that if you are moving to Germany, any foreign tax income you received from outside Germany will now be legally taxable in Germany and has to be declared in your German tax return.

For countries for which Germany has a foreign tax treaty, you can credit foreign taxes paid to the extent that they relate to income that is subject to tax in Germany. So you should not end up having to pay tax twice over.

So there are many different ways to do your tax return.  Here’s a summary of them:

Summary of the Three Ways to Complete Your Tax Return

1. The old-fashioned manual way filling in the printed forms and sending off by post

2. On your computer by downloading the ElsterFormular software or using commercial proprietary software packages like WiSo

3. Directly online using the ElsterOnline website

Income Tax Certificate or Lohnsteuerbescheinigung

At the end of every year, your employer is required by law to provide you with a physical print out of your electronic Lohnsteuerbescheinigung.

Alternatively your employer is now also entitled to provide this in electronic form, but most employers still do it manually.

Do I Need a Tax Accountant or Steuerberater?

A tax accountant in Germany is known as a Steuerberater.

If you are an employee, then you probably won’t need Steuerberater unless your tax affairs are particularly complex.

But – you may benefit from still obtaining some assistance with your tax matters – in particular with completing your annual tax return.

For this you can become a member of a Lohnsteuerhilfeverein. These are non-profit making associations that help employees with their tax affairs for a price which is much lower than what Steuerberater charge.

If you are a high income earner, then you will not be able to use the services of the Lohnsteuerhilfeverein – they are intended for helping “the little man”. Also if you are a freelancer or self-employed you will not be able to use the Lohnsteuerhilfeverein. In these cases you will have to find a Steuerberater.

All Steuerberater charge similar rates for many of their services, set by their professional association.

The Lohnsteuerhilfevereine

You can find your local Verein at www.vlh.de

The VLH (Vereinigte Lohnsteuerhilfe e.V.) is Germany’s biggest Lohnsteuerhilfeverein with more than 850,000 members and some 3,000 offices around the country.

Every member is entitled to a face-to-face consultation with one of the Verein tax staff who will draft your annual tax return.

The membership fee is based on your income and is between 36 and 300 Euros per year. For that you have the service of the Verein available to you for the whole year. This is much cheaper than using a conventional steuerberater.

You can join directly online or by calling in at one of the Verein offices.

Who Can Join the Lohnsteuerhilfeverein?

Employees, civil servants, pensioners, trainees,students, and people receiving social benefits can join the Lohnsteuerhilfeverein.

However you cannot be drawing income from a business or self-employment. Although real estate rental income or income from investments is ok up to a level of around 13,000 per year for a single person.

Claiming Back Your Pension Contributions

If you only stay in Germany for less than 60 months then you may be able to claim the pension contributions back, provided you are leaving the entire EU area.

As to whether citizens from other EU countries can claim back a refund is at present disputed. Within the EU your final pension is calculated according to the contributions you have made to different EU countries systems and according to each countries individual rules.

You can only make a claim 2 years after leaving Europe. Only the employee contribution part is refundable, not the employer’s half.

To submit a claim for a refund, you need to download the forms V900, R851, and A3490 from the DRV Bund (German Pension Insurance), formerly known as the BfA.

Provided your claim is not disputed the funds will be transferred to a bank account of your choice, although it may take several weeks for your claim to be processed.

The German pension system is run by the Deutsche Rentenversicherung Bund (DRV)

Ruhrstrasse 2
10704 Berlin
Tel: +49 (0) 30 8651

www.deutsche-rentenversicherung.de/Allgemein/en

Some (but not all) of their website pages are translated into English and other languages.

The GEZ or Rundfunkbeitrag (TV license tax)

The Rundfunkbeitrag or “Broadcasting Contribution”, sometimes known as the GEZ tax after the name of the organization that used to be responsible for collecting it is basically a TV license tax which almost everyone has to pay.

This is not deducted from your salary, rather you are responsible for paying this directly yourself.

I’m including this here because it’s another tax burden on your income and one that many people disagree with.

It used to be the case that owning a TV, radio, or PC in Germany meant you were required to pay a monthly license fee. This was collected by an organization called the GEZ.

This TV license tax money is used to fund national and regional public broadcasting of the ARD and ZDF organizations and their regional affiliates.

Unlike for example Britain’s license fee funded BBC, and despite charging this high monthly fee, the ARD and ZDF organizations also enjoy a substantial income from airing commercials. So in a sense Germany gets the worst of both worlds: commercials plus license fee.

However in 2013 the system was changed. Instead of abolishing the GEZ tax as for example was done in the Flanders region of Belgium, in Germany its reach was extended to ensure every household now has to pay the GEZ tax.

This tax, now renamed “Rundfunkbeitrag” or Broadcasting Contribution (a contribution sounds much nicer and gentler than a tax or charge), is now 17.50 Euros per household per month.

This compares with around 5 Euros for the old GEZ tax. You would have thought making this tax compulsory would mean a lower rate for everyone, but instead, the authority took the opportunity to bump it up to a shockingly high level.

Whether you have or don’t have a TV, radio, or Internet device is no longer relevant. All households must pay regardless. This makes it much harder to avoid or evade. Even businesses have to pay, according to a complex formula based on the number of employees.

People on low incomes, students and unemployed do not pay anything. People with disabilities pay a reduced rate.

The GEZ used to be notorious for sending inspectors round to gain entrance to people’s homes to search for the presence of radio or tv devices (something that also happens in the UK). In Germany these inspectors were nicknamed by some the “GEZstapo”.

This new GEZ or Rundfunkbeitrag is unpopular with many people and some are refusing to pay. Not only that, but general opinion, even within the broadcasting profession is that the GEZ tax will not be sustainable into the future with the increasing importance of the Internet and alternative media providers.

Second to the GEMA, the German performing rights fees association which levies charges on the recording industry and media outlets such as radio, TV, and YouTube, the Beitragsservice could be one of the most hated organizations in Germany among young people today.

The GEZstapo are at least no more. But you now have to pay more and there is no escape and no mercy is shown. The Beitragsservice the information from the local residence registration office of the boroughs to track everyone down and pursue them.

Escape from the Beitragsservice – is impossible!

Where You Have to Register for the Beitragsservice

And if you are opposed to the GEZ tax or “Rundfunkbeitrag” there is an online protest petition. So far over 90,000 signatures have been collected. You can sign the petition at online-boykott.de/de/unterschriftenaktion

There is also a Facebook page protesting about the tax at: www.facebook.com/events/884929391588982/

Some Useful Addresses for Tax in Berlin

Tax Information Page at Berlin Senat website:  www.berlin.de/special/finanzen-und-recht/steuern

The Federal Tax Authority:

Bundeszentralamt für Steuern
Hauptdienstsitz Bonn-Beuel
An der Küppe 1
53225 Bonn

www.bzst.de

Their email contact page for general questions:

www.bzst.de/SharedDocs/Kontaktformular

Elster www.elster.de

List of Finanzaemter in Berlin: www.berlin.de/sen/finanzen/steuern/finanzaemter

The VLH (Vereinigte Lohnsteuerhilfe e.V.) www.vlh.de

Rundfunkbeitragsservice: www.rundfunkbeitrag.de

Online tax calculator for Lohnsteuer (for employees):

www.bmf-steuerrechner.de/bl2015

For Einkommenssteuer (for freelancers and self-employed):

www.bmf-steuerrechner.de/ekst

Deutsche Rentenversicherung Bund (DRV)

Ruhrstrasse 2
10704 Berlin
Tel: +49 (0) 30 8651

www.deutsche-rentenversicherung.de/Allgemein/en

Anti GEZ Petition: online-boykott.de/de/unterschriftenaktion

One more thing…

Get the Best out of Berlin by Learning German

About the best thing you can do to get the best out of your stay in Berlin is to learn to speak German as soon as you can.

And there’s one German course in particular that stands out way above the rest. It’s called GermanPod.

Learn German Quickly With GermanPod

You can give yourself a head start in learning German by signing up for the self-study MP3 based course offered by GermanPod.

GermanPod is now one of the world’s most successful digitally based online language courses. It’s not hard to see why.

german_desktop_250x250GermanPod – The Best Language Course For Expats in Berlin

You can give yourself a head start in learning German by signing up for the self-study MP3 based course offered by GermanPod.

GermanPod is now one of the world’s most successful digitally based online language courses. It’s not hard to see why.

GermanPod – The Best Language Course For Expats in Berlin

GermanPod is THE ideal audio MP3-based German language course for expats in Berlin.

This is because with GermanPod you learn German quickly in your own time, as and when you want – and at your own pace.

And what’s more, GermanPod is VERY low cost.

You can use GermanPod on your smartphone and tablet, as well on as your laptop or PC.

So you can be learning German wherever you are – and whenever you’re on the move.

With GermanPod you can make the most of those spare moments of time that you have which otherwise just get wasted. When you’re commuting on the S-Bahn or U-Bahn. When standing in line, or sitting in a waiting room.

Learning German With GermanPod is Easy, Fast – And Fun

GermanPod teaches you modern, up-to-date German. The kind of German that people speak in everyday life in Berlin.

GermanPod comes with four different learning levels -Absolute Beginner, Beginner, Intermediate, and Advanced. So you can choose the level which suits you best.

That makes learning German with GermanPod very easy, fast and fun.

I myself learned German using the self-study audio method before I came to Berlin and I found it the fastest and easiest way of learning to speak and understand German.

GermanPod is Very Affordable

GermanPod is available on a monthly subscription basis. It’s “pay as you go”. Unlike some German courses, you don’t have to part with a large sum of money.

For just $8 a month you can get started with GermanPod.

For longer term advance subscriptions there are discounts of between 11% and up to 60%.

And if you’re a student then you can benefit from an EXTRA 20% DISCOUNT on a 12-month subscription.

This makes it very inexpensive to get started learning German with GermanPod.

And it gives you the flexibility to use as little or as much of GermanPod as you wish, when you wish – and according to your own budget.

In short, GermanPod is probably the best investment you can make to ensure the success of your move to Berlin.

My advice: check out www.germanpod101.com and get a head start right now with learning German

Try GermanPod for FREE!

GermanPod gives you an UNLIMITED Lifetime Free Trial of the first three audio lessons with NO obligation.

So you can test drive GermanPod for yourself before you buy.

PLUS you also receive a FREE 7 Day Trial of GermanPod’s Premium package.

You can sign up for a free GermanPod account right now at www.germanpod101.com

GermanPod also comes with a 60-day Money Back Guarantee.So there’s no risk whatsoever.

Start getting yourself up to speed understanding and speaking German NOW by learning German the quick, fun, and easy way with GermanPod.

Visit GermanPod101 at www.germanpod101.com to take the FREE TOUR – and get started learning German right away!

Click here to visit GermanPod

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